So Much Worse Than COVID: The Likely Impacts of Recent U.S. Federal Policy Changes on the Nonprofit Sector

Since January 20, 2025, the Trump Administration has issued a series of executive orders that pose a significant threat to the nonprofit sector. These policies are more damaging than the COVID-19 pandemic and represent a calculated assault on the very fabric of our social safety net. For nonprofits, this is an existential crisis.

I have counseled nonprofits for years and run a business focused on nonprofit risk management for more than a decade, but the past few weeks presage challenges that the nonprofit sector has never faced before. I hope I am wrong. I have the humility to understand that I may well be wrong, because like any human I write from within my own perceptual bubble. But the events as I see them are deeply troubling.

In the paragraphs that follow, I lay out some of my concerns. I had previously written about the likelihood that a second Trump Administration would be profoundly challenging to the nonprofit sector. I write here mostly to counteract any lingering false sense of security among nonprofit leaders.

I heard strains whistling in the dark both leading up to the election and in its aftermath. The past four weeks have been upsetting for some, but others still appear to believe they have little to fear about what goes on far away, inside the Beltway. Having survived COVID, some may feel they are able to withstand whatever happens next. They don’t need risk management because they survived a global pandemic without having a formal early warning system. They don’t need a business continuity plan because they were able to make decisions on the fly in 2020 that allowed them to hunker down and survive the waves of disease. They don’t need to engage in scenario planning, because they saw it all during the dark years of social distancing and stay-at-home orders.

That false confidence, however, will only lead to greater pain.

I expect the excess mortality and suffering caused by the Trump Administration’s current policies to exceed the U.S. excess mortality from the COVID-19 pandemic. But beyond the likely increase in deaths, and the burdens that these suffering populations will place on nonprofits who care for such populations, there are at least four other reasons why this wave of executive action presents dramatically greater challenges for the nonprofit sector and its beneficiaries than the pandemic ever did: (1) Instead of a bailout, massive amounts of money stand to leave the nonprofit sector; (2) The effects are not the result of an aimless disease, but instead they are targeted toward the social sector by individuals who have the power to take further action; (3) The strategy in place depends on chaos, which itself impedes attempts to respond; and (4) While the pandemic eventually subsided, the Trump Administration is pursuing permanent change.

(1) Dramatically Less Money for Nonprofits and Beneficiaries

During the pandemic, the federal government provided financial support to affected sectors, including nonprofits. In stark contrast, the current policies are deliberately cutting off funding to nonprofits, creating chaos and uncertainty. There is no federal bailout in the offing here. Nonprofits are on their own, and they will all be scrambling to energize a donor base that itself will be grappling with changing economic circumstances.

(2) Calculated Conduct by Empowered Actors

The pandemic was a biological phenomenon without a will of its own. By comparison, however, the new Trump policy choices are coldly aimed at undermining the social safety net. There is a calculated intent at work, demonizing vulnerable populations and those who assist them. If you have any doubts about this, talk to someone who is an immigrant, or is gay, or is disabled, or is a woman trying to exercise dominion over her own body. Talk to the organizations tasked with helping those populations, and you will hear fear in those voices.

(3) Flouting Rules of Law and Procedure

The executive orders issued since January have flouted established rules of law and procedure, creating an environment of uncertainty and instability. People cannot reliably manage their affairs in a game where the rules are constantly changing. The complete incoherence of it all is apt to make even the brave leader shake her head in bewilderment.

And let’s not ignore the scope of this assault. Because of the sheer number of actions taken, it’s difficult to count the ways in which our basic norms of justice, due process, and fair play have been deliberately scorned. I’m a lawyer and policy analyst who spent 30 years in the DC Metro area, and I can’t keep track of it all. However, to highlight just a few:

• No president has begun his term by pardoning hundreds of people who, at his instigation, unlawfully marched on the Capitol, many of them committing acts of violence against law enforcement personnel.
• Since civil service was adopted 150 years ago, no president has sought to fire a substantial portion of the federal government workforce at the beginning of his term, leading to a drain of professional expertise unparalleled in U.S. history.
• No president has purported to use executive fiat to cut off tens of billions of dollars allocated by Congress. The person who tried to impound a much smaller amount (Nixon) had his gambit reversed, without dissent.
• No president has compromised the law enforcement independence of the Justice Department by appointing a member of the White House to direct the investigation of the President’s purported enemies both inside and outside the government.
• No president since the ratification of the Twenty-second Amendment has entered a second term publicly and repeatedly musing about whether he might just serve a third one.

And then there is Elon Musk’s role with the Department of Government Efficiency (DOGE). Musk’s DOGE commission has been tasked with overhauling the federal government and cutting spending. The commission’s actions have further hampered the ability of the federal government to perform the tasks assigned to it by Congress. Musk’s DOGE commission has terminated federal contracts, cut the federal workforce, gained access to sensitive data, and channeled critical hiring and firing decisions to themselves. These actions have added to the environment of chaos and inefficiency, making it difficult for federal agencies to function effectively.

(4) Permanent Change

Unlike the pandemic, which was a passing event, the current policies aim to permanently change the country. The manifest goal here is to implement lasting changes in priorities or create so much disruption that the prior state of affairs cannot be restored. This is a fire that not only burns down trees but also alters the soil composition, making it impossible for regrowth. Even if the courts try to impose fire breaks, the damage will be intense and long-lasting.

By eliminating federal programs and federal expertise, these changes inhibit rational policy formulation. Downstream, the changes make it much harder for nonprofits to perform a host of duties that they have taken on over the year.

And who, we might ask, will stop this wholesale attack on our public institutions and reverse the chaos? The Republican House and Senate? They are too busy proposing to rename Greenland “Red White and Blueland.” The Supreme Court, which has unraveled settled law relating to federal regulatory power? The Court that issued a decision that held that President Trump is absolutely immune from criminal prosecution for actions within his “conclusive and preclusive” constitutional authority and presumptively immune to prosecution “for all his official acts”? I’m not holding my breath.

In short, the recent executive orders issued by the Trump Administration, coupled with Elon Musk’s DOGE commission, represent a calculated assault with profound implications for nonprofits. The excess mortality and suffering caused by these policies will likely exceed the impact of the COVID-19 pandemic, but the full effect on the sector, and ultimately our social fabric, will be even worse. Nonprofit risk management is more critical than ever before. Complacency or denial will only add to the challenges.